Greetings, and welcome to Sunoco LP's second quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Scott Grischow, Vice President, Investor Relations and Treasury. Thank you. You may begin. Thank you, and good morning, everyone. On the call with me this morning are Joe Kim, Sunoco LP's President and Chief Executive Officer, Karl Fails, Chief Operations Officer, Dylan Bramhall, Chief Financial Officer, and other members of the management team. Today's call will contain forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the partnership's future operations and financial performance, including expectations and assumptions related to the impact of the COVID-19 pandemic. Actual results could differ materially, and the partnership undertakes no obligation to update these statements based on subsequent events. Please refer to our earnings release as well as our filings with the SEC for a list of these factors. During today's call, we will also discuss certain non-GAAP financial measures, including adjusted EBITDA and distributable cash flow as adjusted. Please refer to the Sunoco LP website for a reconciliation of each financial measure. I will now turn the call over to Dylan to discuss the second quarter results and our outlook for the remainder of 2022. Thanks, Scott. The second quarter brought a continuation of Sunoco's strong financial performance with the resiliency of our business more evident than ever. Sunoco's consistent financial results throughout commodity cycles and various macro environments have become the hallmark of our partnership. We expect the second half of the year will bring more of the same. The free cash flow generation of our operations allows us to remain consistent in our capital allocation strategy and focus on our three pillars. First, to maintain a stable and secure distribution for our unit holders. Second, to protect our balance sheet through debt paydown when prudent. Third, to pursue disciplined investment in our growth opportunities like the recent acquisitions we've announced the past few quarters. With leverage around our target level and strong distribution coverage, we're able to reinvest increasing amounts of capital back into the business through organic growth and acquisitions. The result is value creation from these investments, which creates a positive feedback loop that leads to increased distributable cash flow and increased DCF per unit, all while preserving a strong balance sheet. Regarding guidance, in May, we added $25 million to our previous EBITDA range to reflect the acquisition of Gladieux Energy. We are reaffirming our updated full year 2022 adjusted EBITDA guidance of $795 million-$835 million. We remain highly confident in our ability to hit these numbers. Now shifting over to our second quarter 2022 results. The partnership recorded net income of $121 million, and adjusted EBITDA was $214 million compared to $201 million in the second quarter of 2021. Volumes were approximately 2 billion gallons, up 3% versus the comparable period of 2021. Fuel margin was 12.3 cents per gallon versus 11.3 cents per gallon. Total operating expenses were $128 million, up from $102 million in Q2 of last year. This increase was primarily driven by the NuStar and Gladieux acquisitions and some additional costs that we reinstated over 2021 that had been temporarily cut during the onset of the COVID pandemic. Second quarter distributable cash flow as adjusted was $159 million, yielding a current quarter coverage ratio of 1.83x and a trailing twelve-month coverage ratio of 1.7x. On July 26, we declared an 82.55 cent per unit distribution consistent with last quarter. Leverage at the end of the quarter was 4.17x, a decrease from the first quarter as we worked through the integration of the Gladieux acquisition and got down to a lower run rate inventory level. We expect to continue to work this number down closer to our long-term target of 4.0x as the year progresses. The second quarter's strong results demonstrate our continued consistent performance throughout any operating environment. Our belief is that Sunoco's financial stability and distribution yield make our equity a very compelling value proposition during these volatile times. With that, I'll now turn the call over to Karl to walk through some additional thoughts on the second quarter performance and recent growth initiatives. Thanks, Dylan. Good morning, everyone. We delivered another solid quarter supported by continued margin strength and expense discipline. Starting with the market, commodity prices in the second quarter continued the extreme volatility that we saw in the first quarter. From beginning to end, RBOB gasoline futures were up around $0.50 a gallon, and from peak to trough, were up over $1 a gallon. Diesel futures were even more volatile, with a similar $0.50+ per gallon rise through the quarter, but up over $1.50 a gallon from peak to trough. During the latter half of the quarter, RBOB and diesel futures prices eased, which contributed to some much-needed relief to customers at the pump, which has continued into the third quarter. Just like the American consumer, Sunoco prefers a lower price environment. Despite the high prices and challenging market movements, the second quarter is yet another example of the resiliency of our business model. Volumes for the quarter were up almost 3% versus the second quarter of last year. If we go back to the beginning of the year, volumes were depressed in January due to the effects of Omicron, but they improved compared to last year in the back end of the first quarter. With the run-up in prices, beginning with Russia's invasion of Ukraine, we started watching for demand impacts, but we added volume with our Gladieux acquisition at the beginning of the second quarter that counteracted any losses. As we ended the second quarter and have started the third quarter, we continue to see some minor reductions in volumes consistent with other published data. While we obviously watch volumes closely, the last few years have demonstrated that regardless of demand trends, margins will adjust, and we will deliver on our gross profit expectations. On the subject of margins, in the second quarter, we delivered strong results of $0.123 per gallon. This is one more period of strong margins, even in the face of dramatic price increases across the quarter. These margins were supported by the same factors that we've talked about in the past. Industry breakevens that continue to stay elevated, especially in the face of rising inflation. A gross profit optimization strategy that is part of our day-to-day business, which particularly helps us in volatile market conditions. I've talked in the past about the benefits of volatility on our margins, and this quarter was another example of that. It is also worth pointing out that while we continue to talk about our resilient business model, this does not happen by accident. Starting with the divestment of much of our retail network almost five years ago, we continued to adjust and refine our business portfolio to strengthen and solidify our results. Many of these changes have been visible with our acquisitions, building up a stable transmix processing business and increasing our footprint in product terminals. Some of these changes are more behind the scenes as we fine-tune and adapt our fuel supply strategy and evaluate our various sales channels and move sites from one channel to another when it makes sense for both us and our customers. In addition to a track record of good financial results, we've also established a track record of adapting and improving our business as markets and external factors change. I also wanna provide some updates on our Gladieux acquisition and Brownsville terminal ramp-up. We now have a quarter under our belt with Gladieux, and it has confirmed what we liked about the business. The employees have been a great addition to our team, and the assets are performing as we expected. Brownsville continues to ramp up. In addition to our own fuel distribution volumes that we moved to the terminal on startup, some of our third-party partners have now moved into the terminal and are ramping up their volumes. Overall, we expect to deliver on our expectations with both of these additions to our portfolio. On expenses, Dylan shared that we were up sequentially in the second quarter, primarily as a result of our Gladieux acquisition. In addition, when we compare to last year, there are some items like credit card fees that are higher in the current market condition, but are generally passed through and don't impact our EBITDA. We have also talked about expenses that we brought back into our business in the second half of last year, primarily investments in our workforce. These are all included in our outlook for the year. The same expense diligence that we've demonstrated during the last few years is still in place and will be into the future. Before turning over to Joe, I will reiterate the resiliency of our underlying business. We will continue to focus on delivering results for our stakeholders through our proven recipe of gross profit optimization, tight expense control, solid efficient operations, and growing our core business as we start the second half of 2022. Joe? Thanks, Karl. Good morning, everyone. We delivered a very strong second quarter. Dylan and Karl have walked you through the key details. However, there are a few items I wanna emphasize. We've seen record prices for both gasoline and diesel this year. Prices have retreated since the June high point, but it remains above the average price over the last decade. The demand recovery that we expected this year has been affected by higher prices. However, for the second quarter, we did see an increase versus last year. Looking forward, we expect fuel volume for the second half of this year to be similar to the first half. As I stated on our last call, the longer-term impact of higher prices is still to be determined. Fuel demand will center around a few key questions. How long will higher prices remain? How many more workers will return to a more traditional pre-COVID commuter schedule? Finally, how is the overall economy performing? Even with all these questions, we expect 2022 to be another strong year for Sunoco. Margins should remain healthy, given higher industry break-evens and continued volatility. In addition, we'll continue to actively manage all aspects of our business to optimize for expected and unexpected conditions. Over the last five years, we have demonstrated our business can deliver consistent results and disciplined growth in evolving market conditions. At the foundation, our core business remains strong and resilient, and more importantly, we expect this to continue. Within various macro volume scenarios, we expect to optimize gross profit and deliver attractive results. Also, we have prudently invested over the years, and it has resulted in EBITDA growth while growing coverage and lowering leverage. We expect our growth strategy to yield attractive return opportunities in the future. We'll continue to build on our history of maintaining financial discipline, which means protecting the security of our distribution while also protecting our balance sheet. In uncertain times, we expect Sunoco to be one of the most resilient performers in the sector. Operator, that concludes our prepared remarks. You may open the line for questions. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Our first question comes from Gabe Moreen with Mizuho. Please proceed with your question. Hey, good morning, guys. Congrats on managing all the volatility out there. I had a question on, given that volatility, whether you're seeing any other smaller wholesale distributors having a more difficult time navigating the environment, whether that may be shaking anything out from an M&A standpoint. As always, just curious on thoughts on M&A in general. Hey, Gabe, it's Joe. Let me take those questions in two parts. As far as other wholesalers, I think probably the thing to keep in mind is that, you know, we've mentioned it on previous conference calls about higher break-evens. The higher break-evens should be helping the overall industry as a whole with higher margins at whatever demand recovery trend line that we're seeing. With that said, I think it's like with any other industry, the more efficient operators are gonna do better in those environments, the less efficient operators are gonna do worse. You know, with our scale, we're definitely on the most efficient operator from a fuel distribution standpoint. Overall, for the sector, the higher break-evens is gonna help everybody, but some people are gonna win more than others. As far as on the M&A side, what we're seeing is something pretty similar to what we saw last year, both for fuel distribution and midstream. I still believe it's a buyer's market, especially for strategic offering synergies to the table. For Sunoco, we're in a good position. When the right opportunity comes up at the right price, I think we're in a very good position to act upon it. Thanks, Joe. Maybe if I can, there was some discussion about reintroducing some of the investments that you may have or costs that you may have scaled back due to COVID. I'm just wondering kind of where you are in that process, whether the current quarterly run rate on expenses, you know, takes a lot of the, I guess, fluctuations from credit card fees, whether that's a good run rate. Yeah, Gabe, this is Karl Fails. I think you hit the nail on the head that minus some of the costs that are generally passed through that might adjust with the market like credit card fees. Yeah, I think we're at a good run rate and you know, one of the things that I think we've done well is we brought some of those costs back, but we've also added whether it's through growth capital or through acquisition, right? We put a lot of money to work, right? We still think even as we continue to grow, that we'll be able to stay efficient, very efficient on the expense side. Great. Thanks, Karl. Yeah. Our next question is from Elvira Scotto with RBC Capital Markets. Please proceed with your question. Hey, good morning, everyone. Was wondering if you, I know you touched a little bit on demand destruction, but maybe how does the you know July volumes look versus you know the year ago or maybe the previous month, and just sort of what you're seeing here at the start of the third quarter? Hey, Elvira Scotto, it's Joe Kim. Volume, I think, you know, I'm gonna work a little bit backwards on this 'cause I think the path that we've been on this year is interesting, that, you know, if you look back to 2021, there was momentum on the volume recovery in the U.S. We enter into January, and we have a COVID spread happen in the U.S. Obviously, that depressed volume. After the COVID spread mitigated, we started to see year-over-year growth in volume. In March, the Ukraine war breaks out, and high prices enter the market, and we started seeing demand go back down again. If you kind of put all that into perspective, the second quarter, our best estimate for U.S. demand, we think is probably down about 5% in the second quarter. Heading into July and August, we're seeing that same trend line kinda play out on what happened in the second quarter. I think for Sunoco specifically, I think the thing to keep in mind is that, regardless of which demand recovery scenario plays out, I think our history has shown that we're gonna deliver consistent gross profit. If demand goes up, we're gonna enjoy the benefits of that. If demand goes down, breakevens are gonna go up, and we're gonna balance that out with higher margins. That's kind of where we stand right now. Great. That makes. That's helpful. Can you talk a little bit about labor? I know, you know, in the past that had been tightness in the market, but just curious if you're starting to see some loosening in the labor market and then specifically for Sunoco. Yeah, Elvira, this is Karl. I think you know I mentioned in my prepared remarks we've made some investments in our people, and I think some of that is us starting even back going back into last year, making any changes, whether it's in wages or you know targeting certain areas and beefing up our staffing to make sure that we dealt with that. You know, since we've made those changes, I think we're in a good position, and we're comfortable. I mean, on the one hand, we think that we're a good employer and have a lot to offer to people come work for us, and we've been able to, I'd say for the last six months or so, we've been in a good spot there. Great. Thank you. Just my last one. I know you talked about some of the things that you've been, you know, some of the changes behind the scenes, such as fine-tuning your strategy and sales channel. Can you provide a little more detail around those comments? Yeah, Elvira. I mean, you know, we've talked about this in the past, that we really operate a portfolio of income streams. Through our different sales channels, it's really an opportunity for us to look at and optimize, you know, maybe have a higher weighting in some geographies in one sales channel than another. We would actually love to share a lot more detail about our sales channel, but we think that how we manage those is one of our competitive advantages and one of the reasons why we don't provide more detail on, you know, individual volumes and margins in those channels. I don't know that I can give you a lot of, you know, number and specifics, but I can give a couple examples. You know, we control a lot of properties ourselves, and one of the things we do is we work with our customers and, you know, we have various, whether it's a dealer operation or we've talked about our commission agent model. That's one example of we'll work with our customer, and maybe change from one of those to another that's mutually beneficial. Those are the kind of things that I mean when we talk about sales channel optimization. You know, there are others where maybe it might make sense for us to move from a dealer model to a distributor model. Those are a couple examples. Great. Thank you very much. You bet. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from John Royall with JP Morgan. Please proceed with your question. Hey, guys. Good morning. Thanks for taking my question. I just had a follow-up on the inflation and OpEx side. I know you've spoken to it a little bit, but 2Q looks like a pretty modest amount of growth over the first quarter, given how much volume growth you've had and an acquisition being layered in as well. Just wondering if there are some efficiencies that you've captured or anything else you can speak to on the OpEx side. Just, you know, expected a little bit more growth in 2Q than what we actually saw. Yeah, John, thanks. Good question here. No, really from 1Q to 2Q, that amount is really entirely gonna be related to the acquisition. In fact, a little bit more than that. You are seeing some benefits there of just a little bit of optimization and efficiencies running through there as well. Like Karl said, I think as we've gotten to this point here, integration's going great on both the acquisitions and we're seeing the efficiencies we hope to see there. I think we are, like you said, absent some of these items like credit card that may run with volumes and pricing, at a pretty good run rate here now with the second quarter numbers. All right. Thanks. That's really helpful. Just looking at your balance sheet leverage, it's ratcheting down relatively quickly. It seems like it could continue to if the environment stays strong and you don't have any major M&A. Can you just talk about how your strategy might change when you get to the four times? I don't think you have much desire to raise the distribution. How do you think about the uses of cash once you're at your leverage target? Yeah. I think right now, you know, we're leaning into growth at the leverage target and with strong coverage. You know, as I said in the prepared remarks, we have increasing amounts of capital to redeploy into organic growth and M&A. The returns that we're able to see right now in the market, both from what we're seeing in the M&A market as well as the organic opportunities we have, are providing really strong returns. I think that's where we lean into, is that we see that providing the best benefit and the best value long term to our unitholders. Great. Thanks very much. Our next question is from Ned Baramov with Wells Fargo. Please proceed with your question. Hey, good morning. Thanks for taking the questions. You reaffirmed your growth CapEx guidance for 2022, and it seems like this is after a fairly light spending in the first half of the year. Could you maybe talk about the cadence of CapEx in the second half of the year? Yeah, you bet, Ned. If you look back at our last probably two or three years, we've been back weighted on both our maintenance and our growth capital, and I think that's due to two reasons. One, it's intentional on our part. We think it's prudent for us to have more capital in the back part of the year. You know, that really was to our advantage in a year like 2020 when something very unexpected hit. It was very easy for us to control our capital. We didn't have too much overly committed, and we were able to adjust that spending. That's one, it's just kind of a management preference that we'll back weight our capital. Then two, part of it's just the nature of our business and the cycle of. You think about on the growth side, sorry, a lot of our capital is spent to sign up new customers on, you know, 7-10 year contracts. Just that natural cycle often leads to us spending more money in the third and fourth quarters than in the first and second quarters. We're still comfortable that we're gonna hit those numbers that we shared. That's great. Thanks. Thanks for the color. Question on some of the acquired NuStar assets. I think you previously noted they could be potentially trending lower than your original expectations, given the higher exposure to storage, which does not fare well during periods of backwardation. Could you provide an update on your expectations there? Yeah, Ned Baramov. I think we are really still happy with our NuStar assets and don't see us trending below those expectations. Yeah, the storage market is tough in a backwardated market like we have, but we have really good assets. We have really good commercial team, and so, yeah, we're still feeling really good about those assets. Ned, this is Joe. I'll go even stronger than Karl. We're very happy with them. We had high expectations for the NuStar assets, and we've delivered on it. I actually see more upside than downside even based on our original economics that we put out. That's perfect. That's all I had today. Thank you. Thanks. We've reached the end of the question and answer session. I'd now like to turn the call back over to Scott Grischow for closing comments. Well, thanks everyone for joining us on the call this morning. As always, if you have any questions, feel free to reach out, and we'll talk to everyone soon. Have a great day. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.